Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 13, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | SIERRA MONITOR CORP /CA/ | |
Entity Central Index Key | 0000100625 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 10,242,418 | |
Trading Symbol | SRMC | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 2,256,045 | $ 2,963,569 |
Trade receivables, less allowance for doubtful accounts of approximately $67,000 and $68,100 at March 31, 2019 and December 31, 2018, respectively. | 2,727,211 | 2,342,342 |
Inventories, net | 4,125,937 | 4,233,787 |
Prepaid expenses and other current assets | 937,911 | 610,208 |
Income tax deposit | 151,680 | 153,662 |
Total current assets | 10,198,784 | 10,303,568 |
Property and equipment, net | 336,586 | 366,370 |
Deferred income taxes | 81,000 | 81,000 |
Lease right-of-use, net | 962,830 | |
Other assets | 198,903 | 211,993 |
Total assets | 11,778,103 | 10,962,931 |
Current liabilities: | ||
Accounts payable | 765,912 | 1,109,863 |
Accrued compensation expenses | 681,469 | 822,357 |
Lease right-of-use liability | 340,332 | |
Other current liabilities | 98,840 | 64,103 |
Total current liabilities | 1,886,553 | 1,996,323 |
Long-term liabilities | ||
Lease right-of-use liability | 926,422 | |
Total liabilities | 2,812,975 | 1,996,323 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock, $0.001 par value; 20,000,000 shares authorized; 10,242,418 shares issued and outstanding, respectively | 10,242 | 10,242 |
Additional paid-in capital | 4,827,671 | 4,768,399 |
Retained earnings | 4,127,215 | 4,187,967 |
Total shareholders' equity | 8,965,128 | 8,966,608 |
Total liabilities and shareholders' equity | $ 11,778,103 | $ 10,962,931 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 67,000 | $ 68,100 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 10,242,418 | 10,242,418 |
Common stock, shares outstanding | 10,242,418 | 10,242,418 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 5,523,218 | $ 5,151,016 |
Cost of goods sold | 2,273,258 | 1,984,562 |
Gross profit | 3,249,960 | 3,166,454 |
Operating expenses | ||
Research and development | 738,720 | 774,428 |
Selling and marketing | 1,398,009 | 1,386,364 |
General and administrative | 1,027,880 | 914,712 |
Total operating expenses | 3,164,609 | 3,075,504 |
Income from operations | 85,351 | 90,950 |
Interest income | 31 | 308 |
Income before income taxes | 85,382 | 91,258 |
Income tax provision | 43,710 | 39,997 |
Net income | $ 41,672 | $ 51,261 |
Net income available to common shareholders per common share: | ||
Basic | $ 0 | $ 0.01 |
Diluted | $ 0 | $ 0 |
Weighted average number of common shares used in per share computations: | ||
Basic | 10,242,418 | 10,203,995 |
Diluted | 11,356,805 | 10,328,108 |
Statements of Shareholders' Equ
Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2017 | $ 10,204 | $ 4,482,403 | $ 4,426,612 | $ 8,919,219 |
Balance, shares at Dec. 31, 2017 | 10,203,995 | |||
Stock-based compensation | 46,660 | 46,660 | ||
Dividends paid | (102,040) | (102,040) | ||
Net Income (loss) | 51,261 | 51,261 | ||
Balance at Mar. 31, 2018 | $ 10,240 | 10,203,995 | 4,375,833 | 8,915,100 |
Balance, shares at Mar. 31, 2018 | 10,203,995 | |||
Balance at Dec. 31, 2018 | $ 10,242 | 4,768,399 | 4,187,967 | 8,966,608 |
Balance, shares at Dec. 31, 2018 | 10,242,418 | |||
Stock-based compensation | 59,272 | 59,272 | ||
Restricted stock vested | ||||
Restricted stock vested, shares | ||||
Dividends paid | (102,424) | (102,424) | ||
Net Income (loss) | 41,672 | 41,672 | ||
Balance at Mar. 31, 2019 | $ 10,242 | $ 4,827,671 | $ 4,127,215 | $ 8,965,128 |
Balance, shares at Mar. 31, 2019 | 10,242,418 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 41,672 | $ 51,261 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 73,276 | 58,538 |
Provision for bad debt expense | (515) | (7,805) |
Provision for inventory losses | 15,000 | 30,000 |
Noncash lease expense | 16,689 | |
Stock-based compensation expense | 59,272 | 46,660 |
Change in operating assets and liabilities: | ||
Trade receivables | (384,354) | 400,235 |
Inventories | 92,850 | (414,460) |
Prepaid expenses | (29,849) | 6,731 |
Income tax deposit | 1,982 | 38,625 |
Lease right- of- use | 74,464 | |
Accounts payable | (343,951) | 114,485 |
Accrued compensation expenses | (140,888) | 108,788 |
Lease liability | (85,083) | |
Other current liabilities | (8,973) | (54,911) |
Net cash (used in) provided by operating activities | (574,698) | 378,147 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (30,402) | (68,467) |
Net cash used in investing activities | (30,402) | (68,467) |
Cash flows from financing activities: | ||
Dividend payout | (102,424) | (102,040) |
Net cash used in financing activities | (102,424) | (102,040) |
Net (decrease) increase in cash and cash equivalents: | (707,524) | 207,640 |
Cash at beginning of period: | 2,963,569 | 3,191,722 |
Cash at end of period: | 2,256,045 | 3,399,362 |
Non-cash financing and investing activities: | ||
Obtaining a right of use asset in exchange for lease liability | 1,335,148 | |
Lease liability established through right of use asset | $ 1,335,148 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed financial statements have been prepared by Sierra Monitor Corporation (the “Company,” “we,” or “us”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. Amounts related to disclosure of December 31, 2018 balances within these interim condensed financial statements were derived from the audited 2018 financial statements and notes thereto. These financial statements and the notes hereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on April 1, 2019. In the opinion of the Company, all adjustments, including normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows of the Company for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results for any subsequent interim period or for the full year. |
Summary of Business
Summary of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Business | Summary of Business Founded in 1978, Sierra Monitor Corporation (OTCQB:SRMC), is a provider of Industrial Internet of Things (IIoT) solutions that address the industrial and commercial facilities management targeting facility automation and facility safety requirements, also referred to as “Connect” and “Protect”. On March 28, 2019 the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) MSA Safety Incorporated (“MSA”), a global safety equipment manufacturer and MSA’s indirect, wholly owned subsidiary, Gateway Merger Sub, Inc., a California corporation (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with SMC surviving the Merger as an indirect wholly owned subsidiary of MSA (the “Merger”). Upon completion of the Merger, each share of common stock, $0.001 par value per share, of the Company, issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”), other than shares owned or held in treasury by SMC, owned by MSA or Merger Sub, or with respect to which the holder thereof has properly exercised dissenters’ rights, will be cancelled and converted into the right to receive $3.25 in cash per share, without interest and less any required withholding taxes. Under the Merger Agreement, at the Effective Time of the Merger, MSA Safety will assume vested or unvested and outstanding stock options and restricted stock awards granted to Company employees. The Company’s FieldServer family of protocol gateways, routers, and network explorers targets facility automation requirements, and is used by original equipment manufacturers (“OEMs”) and system integrators to enable local and remote monitoring and control of assets and facilities. The FieldServer family of products works with the FieldPoP™ device cloud portal; a cloud-based service that registers and manages FieldServer products, provides secure remote access to the local web-based applications that run on FieldServer products, and integrates with third-party applications over REST APIs. With more than 200,000 installed gateways supporting over 140 protocols such as BACnet, LonWorks, MODBUS, and XML in commercial and industrial facilities, FieldServer is the industry’s leading multi-protocol gateway brand and is delivered in a variety of form factors appropriate to the asset being interfaced. The intellectual property in FieldServer products is embodied in the proprietary embedded software that runs on a variety of customized hardware platforms with different connectivity options such as Serial, Ethernet, WiFi, or cellular. In addition to bridging data protocols between various assets or devices within a facility, the embedded software includes value-added “fog” or “local application” software for monitoring, logging, alarming, and trending local field data. Additionally, the embedded software enables the assets or devices in the facility to securely connect to third-party clouds and to the Company’s own FieldPoP device cloud portal. The FieldPoP device cloud portal is a proprietary, secure, and scalable Software-as-a-Service product and is developed and deployed using the same core technologies and providers that are used by many of the world’s leading web sites and Internet-based services. The Company’s Flame and Gas (F&G) detection solutions target facility safety requirements and are used by industrial and commercial facilities managers to protect their personnel and assets. The motivation for installing gas detection systems is driven, in part, by industrial safety professionals guided by the United States Occupational Safety and Health Administration, state and local governing bodies, insurance companies and various industry rule-making bodies. The solution consists of proprietary system hardware that runs embedded controller and gateway software, detector modules that sense the presence of various toxic and combustible gases and flames, connectivity between the modules and the controller, and a user interface and applications that a facility manager can interact with, either locally on site or remotely over the Internet. The complex software embedded in the various products facilitates system-wide functions such as calibration, alarm detection, notification, and mitigation. The controller software also includes local web-based applications that simplify management of the complete solution and a gateway to integrate the flame and gas detection solution with the facility’s local supervisory system or to the Company’s FieldPoP device cloud portal. With more than 100,000 detector modules sold, our flame and gas detection solutions are deployed in a variety of facilities, such as oil, gas and chemical processing plants, wastewater treatment facilities, alternate fuel vehicle maintenance garages and other sites where hazardous gases are used or produced. The Company’s solutions are also sold to telecommunication companies and their suppliers to manage environmental and security conditions such as temperature, gas, and smoke in remote structures such as local DSL distribution nodes and buildings at cell tower sites. |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies a) Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) Accounting Standards Update (“ASU”) ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). ASC 606 requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. The Company’s revenues are derived from the sale of FieldServer products, FieldServer products services, Gas Detection and Environment Control products, and Gas Detection and Environment Control products services. The Company accounts for a contract with a customer when there’s approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s revenue arrangements consist of multiple performance obligations including hardware, software, and services. Determining the stand-alone selling price (“SSP”) and allocation of consideration from an arrangement to the individual performance obligations, and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. The Company does not provide credits, incentives or retroactive discounts, which may be required to be accounted for as variable consideration when estimating the amount of revenue to be recognized. The Company from time to time provides a right of return to its customers and the Company uses expected value method to estimate the potential value of the customer returns to reduce the transaction price. The impact has been deemed to be immaterial, thus there is no disclosure related to sales returns, return on assets and refund liability. When the Company’s products and services are sold in bundled arrangements (e.g., hardware, software, and/or services), for bundled arrangements, the Company accounts for individual products and services separately if they are distinct, that is, if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products or services in a bundle based on their individual SSP. The SSP is determined based on observable prices at which the Company separately sells the products and services. If an SSP is not directly observable, then the Company will estimate the SSP considering marketing conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available. The following is a description of the principal activities from which the Company generates its revenues: Gas Detection and Environment Control Products Gas Detection and Environment Control Products are sold as off-the-shelf products with prices fixed at the time of order. Orders delivered to the Company by phone, fax, mail or email are considered valid purchase orders and once accepted by the Company are deemed to be the final understanding between us and our customer as to the specific nature and terms of the agreed-upon sale transaction. The creditworthiness of customers is assessed prior to the Company accepting a customer’s first order. Additionally, international customers and customers who have developed a history of payment problems are generally required to prepay or pay through a letter-of-credit. Revenue is recognized at a point in time when control of the product is transferred to the customer, generally occurring upon the shipment or delivery dependent upon the terms of the underlying contract when (a) for FOB factory orders they leave our shipping dock or (b) for FOB customer dock orders upon confirmation of delivery. Gas Detection and Environment Control Services Gas detection and environment control services consist of field service orders (technical support) and training, which are provided separately from product orders. Orders are accepted in the same forms as discussed for Gas Detection and Environment Control Products above with hourly prices fixed at the time of order. Revenue recognition occurs only when the service activity is completed. Such services are provided to current and prior customers, and, as noted above, creditworthiness has generally already been assessed. In cases where the probability of receiving payment is low, a credit card number is collected for immediate processing. Revenue is recognized in the period the technical support and training are performed. FieldServer Products FieldServer products are sold in the same manner as Gas Detection and Environment Control Products (as discussed above) except that the products contain embedded software, which is integral to the operation of the device. The software embedded in FieldServer products includes two items: (a) a compiled program containing (i) the basic operating system for FieldServer products, which is common to every unit, and (ii) the correct set of protocol drivers based on the customer order (see FieldServer Services below for more information); and (b) a configuration file that identifies and links each data point as identified by the customer. The Company determined that the hardware, and the embedded software as defined above represent one performance obligation because the hardware is dependent upon and highly interrelated with the embedded software, and without which the hardware can’t operate. Generally, the software included in each sale does not require significant production, modification or customization and, therefore, the Company recognizes revenues at a point in time when control of the product is transferred to the customer generally occurring upon the shipment or delivery of products (depending on shipping terms), as described in Gas Detection and Environment Control Products above. If the software requires modification, refer to FieldServer Services for details. FieldServer Services FieldServer services consist of orders for custom development of protocol drivers. Generally, customers place orders for FieldServer products concurrently with their order for protocol drivers. However, if custom development of the protocol driver is required, the product order is not processed until development of the protocol driver is complete. The driver development involves further research after receipt of order, preparation of a scope document to be approved by the customer and then engineering time to write, test and release the driver program. When development of the driver is complete the customer is notified and can proceed with a FieldServer product. Revenues for protocol driver development are recognized at a point in time when the control of the product is transferred to the customer generally occurring upon shipment or delivery of the related product that includes the developed protocol drivers (as noted in FieldServer Products above). Discounts and Allowances Discounts are applied at time of order entry and sales are processed at net pricing. No allowances are offered to customers. b) Contract Costs Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs mainly include the Company’s internal sales force compensation program and are included in sales and marketing expenses at the time the revenue is recognized. c) Warranty The Company provides a warranty on all products sold for a period of two years after the date of shipment. Warranty issues are usually resolved with repair or replacement of the product. This standard warranty is assurance type warranty and does not offer any services in addition to the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, estimated future warranty obligations related to products are provided by charges to condensed statements of operations in the period in which the related revenue is recognized. d) Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of only advance payments, where the Company has unsatisfied performance obligations. Contract liabilities are classified as deferred revenue and included within “Other current liabilities” on the condensed balance sheets. At times, billing may occur subsequent to revenue recognition, resulting in an unbilled receivable which represents a contract asset. The Company does not have any unbilled receivable on the condensed balance sheets. Deferred Revenue for the quarter ending March 31, 2019 December 31, 2018 Sept. 30, 2018 June 30, 2018 March 31, 2018 (unaudited) (unaudited) (unaudited) (unaudited) Beginning balance $ 28,658 $ 32,914 $ 62,639 $ 62,031 $ 61,673 Deferred revenues added 1,100 - 1,000 1,300 800 Previously deferred revenues recognized (733 ) (4,256 ) (30,725 ) (692 ) (442 ) Total, net $ 29,025 $ 28,658 $ 32,914 $ 62,639 $ 62,031 Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. There were no significant changes in estimates during the period that would affect the contract balances. The amounts of revenue recognized during the three months ended March 31, 2019 and March 31, 2018 from the opening deferred revenue balances were $733 and $442, respectively. For the periods ended March 31, 2019, and March 31, 2018 no impairment losses related to contract balances were recognized in the condensed statement of operations. e) Disaggregation of Revenue In the following table, net sales are disaggregated by geographic region The Company conducts business across 5 geographic regions: United States & Canada, Latin America, Europe, Middle East and Asia. FieldServer Products Flame & Gas Products Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 United States & Canada $ 2,721,000 $ 2,162,000 $ 2,087,000 $ 2,171,000 Latin America 18,000 59,000 16,000 36,000 Europe 244,000 219,000 5,000 34,000 Middle East 119,000 117,000 75,000 101,000 Asia 138,000 103,000 100,000 149,000 $ 3,240,000 $ 2,660,000 $ 2,283,000 $ 2,491,000 f) Shipping and Handling The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. g) Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performances obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted that are scheduled or in the process of being scheduled for shipment. As of March 31, 2019, the remaining performance obligation is approximately $3,882,000, 36% or $1,379,000 of which is expected to be recognized in 3 months and 72% or $2,782,000 of which is expected to be recognized within nine months. The remainder is expected to be recognized after fiscal year 2019. h) Recent Accounting Pronouncements Recent accounting pronouncements discussed in the notes to the December 31, 2018 audited financial statements, filed previously with the SEC in our Annual Report on Form 10-K on April 1, 2019, that are required to be adopted during the year ended December 31, 2019, did not have or are not expected to have a significant impact on the Company’s 2019 financial statements. In February 2016, the Financial Accounting Standard Board (“FASB”) issued ASU 2016-02, Leases (ASC 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize Right-Of-Use (“ROU”) Asset and Lease Liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 842 using the modified retrospective method for all material leases that existed at or commenced after January 1, 2019. ROU Assets are amortized over their estimated useful life, which represents the full term of the lease. The lease liability is representative of the present value of future payments due under the lease, discounted using the incremental borrowing rate. The lease liability will be increased by accreted interest at the incremental borrowing rate and reduced by future payments made under the lease obligation. On January 1, 2019, the Company recognized right of use (ROU) assets and liabilities of $1,335,148 in the accompanying condensed consolidated balance sheet. There was no impact to retained earnings upon the adoption of Topic 842. i) Employee Stock-Based Compensation In April 2016 and in May 2016, the Company’s Board of Directors and the Company’s shareholders, respectively, approved the Company’s 2016 Equity Incentive Plan (the “2016 Stock Plan”) and reserved a total of (i) 279,680 shares, plus (ii) 2,550,320 shares that remained available for issuance under the 2006 Stock Plan immediately prior to its expiration, plus (iii) any shares subject to stock options or restricted stock granted under the 2006 Stock Plan that, on or after the date the 2016 Stock Plan became effective, expired or otherwise terminated without having been exercised in full, or were forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2016 Stock Plan pursuant to clauses (ii) and (iii) equal to 2,668,320. Options granted under our 2006 Stock Plan and 2016 Stock Plan are at the fair market value of our common stock at the grant date, typically vest ratably over four years, and expire ten years from the grant date. As of March 31, 2019, a total of 1,516,000 shares were issued under the 2016 Stock Plan. All share-based payments to employees (incentive stock options) are recognized in the financial statements based on their fair values at the date of grant. The calculated fair value is recognized as expense (net of any capitalization) over the requisite service period, net of estimated forfeitures, using the straight-line method. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class and historical experience. The modified prospective method of application requires compensation expense to be recognized in the financial statements for all unvested stock options beginning in the quarter of award. The cost is based on the grant date fair value of the stock option. Compensation expense recognized in future periods for share-based compensation will be adjusted for the effects of estimated forfeitures. For the three-month periods ended March 31, 2019 and 2018, general and administrative expenses included stock based compensation expense of $59,272 and $46,660, respectively, decreasing the Company’s income before income taxes resulting from the recognition of compensation expense associated with employee stock options. There was no material impact on the Company’s basic and diluted net income per share as a result of recognizing the employee stock-based compensation expense. The Company did not modify the terms of any previously granted stock options during the three-month periods ended March 31, 2019 and 2018. j) Subsequent Events Management has evaluated events subsequent to March 31, 2019 through the date that the accompanying condensed financial statements were filed with the SEC for transactions and other events which may require adjustment of and/or disclosure in such financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories A summary of inventories is as follows: March 31, 2019 December 31, 2018 (unaudited) Raw materials $ 2,094,785 $ 2,223,828 Work-in-process 1,647,593 1,751,671 Finished goods 546,749 406,478 4,289,127 4,381,977 Less: Allowance for obsolescence reserve (163,190 ) (148,190 ) $ 4,125,937 $ 4,233,787 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Net income available to common shareholders per common share: | |
Net Income Per Share | Net Income Per Share Basic earnings per share (“EPS”) is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of common stock issuable upon exercise of stock options using the treasury stock method. No adjustments to earnings were made for purposes of per share calculations. At March 31, 2019, no outstanding options to acquire shares of common stock were not considered potentially dilutive common shares due to the exercise price of such options being higher than the stock price used in the EPS calculation. At March 31, 2018, a total of 808,000 outstanding options to acquire shares of common stock were not considered potentially dilutive common shares due to the exercise price of such options being higher than the stock price used in the EPS calculation. The following is a reconciliation of the shares used in the computation of basic and diluted EPS for the periods ended March 31, 2019 and 2018, respectively: Three months ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Basic EPS – weighted-average number of common shares outstanding 10,242,418 10,203,995 Effect of dilutive potential common shares – stock options outstanding 1,114,387 124,113 Diluted EPS – weighted-average number of common shares and potential common shares outstanding 11,356,805 10,328,108 |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations No customer made up more than 10% of accounts receivable at March 31, 2019 and at March 31, 2018. No customer made up more than 10% of net sales for the three-month periods ended March 31, 2019 and March 31, 2018. The Company currently maintains substantially all of its day to day operating cash with a major financial institution. At times, cash balances may be in excess of the amounts insured by the Federal Deposit Insurance Corporation. Cash balances of approximately $1,756,000 and $2,464,000 were in excess of such insured amounts at March 31, 2019 and December 31, 2018, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in a single business segment, industrial instrumentation. The Company’s chief operating decision maker, the Chief Executive Officer (“CEO”), evaluates the performance of the Company and makes operating decisions based on financial data consistent with the presentation in the accompanying condensed financial statements. In addition, the CEO reviewed the following information on revenues by product category for the following periods: Three months ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Instrumentation $ 2,283,637 $ 2,491,466 FieldServers 3,239,581 2,659,550 $ 5,523,218 $ 5,151,016 |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit The Company maintains a line of credit with its commercial bank in the maximum amount of $2,000,000. No borrowings have been made under the Company’s line of credit during the first three months of fiscal year 2019 and there were no outstanding balances as of March 31, 2019 and December 31, 2018. As of March 31, 2019, the Company was in compliance with the financial covenants of the line of credit. |
Operating Lease
Operating Lease | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Operating Lease | Operating Lease We lease certain office space under a non-cancelable operating lease. This lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further this lease does not contain contingent rent provisions. This lease terminates on April 30, 2023 and we do not have an option to renew. This lease does include both lease (e.g., fixed rent) and non-lease components (e.g., common-area and other maintenance costs). The non-lease components are deemed to be executory costs and are therefore excluded from the minimum lease payments used to determine the present value of the operating lease obligation and related right-of-use asset. This lease does not provide an implicit rate and we estimated our incremental interest rate to be 5%. We used our estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments. Future lease payments under operating leases were as follows for the annual periods ending March 31: 2020 349,691 2021 360,182 2022 370,987 2023 382,117 31,921 Total lease payments 1,494,898 Less: Interest (228,144 ) Present value of lease liabilities 1,266,754 |
Stock Option Grants
Stock Option Grants | 3 Months Ended |
Mar. 31, 2019 | |
Stock Option Grants | |
Stock Option Grants | Stock Option Grants No stock options were granted during the three-month period ended March 31, 2019. A total of 41,000 stock options were granted during the three-month period ended March 31, 2018. |
Stock Option Exercises and Expi
Stock Option Exercises and Expirations | 3 Months Ended |
Mar. 31, 2019 | |
Stock Option Exercises And Expirations | |
Stock Option Exercises and Expirations | Stock Option Exercises and Expirations No stock options were exercised or expired during the three-month period ended March 31, 2019. Also, no stock options were exercised but 1,000 options expired during the three-month period ended March 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company is subject to legal proceedings and claims that arise in the normal course of business. While the outcome of these proceedings and claims cannot be predicted, we currently are not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, is expected to have a material adverse effect on the Company’s financial position or results of operations. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Revenue Recognition | a) Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) Accounting Standards Update (“ASU”) ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606). ASC 606 requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the considerations to which the entity expects to be entitled to in exchange for those goods or services. The Company’s revenues are derived from the sale of FieldServer products, FieldServer products services, Gas Detection and Environment Control products, and Gas Detection and Environment Control products services. The Company accounts for a contract with a customer when there’s approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company’s revenue arrangements consist of multiple performance obligations including hardware, software, and services. Determining the stand-alone selling price (“SSP”) and allocation of consideration from an arrangement to the individual performance obligations, and the appropriate timing of revenue recognition are significant judgments with respect to these arrangements. The Company does not provide credits, incentives or retroactive discounts, which may be required to be accounted for as variable consideration when estimating the amount of revenue to be recognized. The Company from time to time provides a right of return to its customers and the Company uses expected value method to estimate the potential value of the customer returns to reduce the transaction price. The impact has been deemed to be immaterial, thus there is no disclosure related to sales returns, return on assets and refund liability. When the Company’s products and services are sold in bundled arrangements (e.g., hardware, software, and/or services), for bundled arrangements, the Company accounts for individual products and services separately if they are distinct, that is, if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products or services in a bundle based on their individual SSP. The SSP is determined based on observable prices at which the Company separately sells the products and services. If an SSP is not directly observable, then the Company will estimate the SSP considering marketing conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available. The following is a description of the principal activities from which the Company generates its revenues: Gas Detection and Environment Control Products Gas Detection and Environment Control Products are sold as off-the-shelf products with prices fixed at the time of order. Orders delivered to the Company by phone, fax, mail or email are considered valid purchase orders and once accepted by the Company are deemed to be the final understanding between us and our customer as to the specific nature and terms of the agreed-upon sale transaction. The creditworthiness of customers is assessed prior to the Company accepting a customer’s first order. Additionally, international customers and customers who have developed a history of payment problems are generally required to prepay or pay through a letter-of-credit. Revenue is recognized at a point in time when control of the product is transferred to the customer, generally occurring upon the shipment or delivery dependent upon the terms of the underlying contract when (a) for FOB factory orders they leave our shipping dock or (b) for FOB customer dock orders upon confirmation of delivery. Gas Detection and Environment Control Services Gas detection and environment control services consist of field service orders (technical support) and training, which are provided separately from product orders. Orders are accepted in the same forms as discussed for Gas Detection and Environment Control Products above with hourly prices fixed at the time of order. Revenue recognition occurs only when the service activity is completed. Such services are provided to current and prior customers, and, as noted above, creditworthiness has generally already been assessed. In cases where the probability of receiving payment is low, a credit card number is collected for immediate processing. Revenue is recognized in the period the technical support and training are performed. FieldServer Products FieldServer products are sold in the same manner as Gas Detection and Environment Control Products (as discussed above) except that the products contain embedded software, which is integral to the operation of the device. The software embedded in FieldServer products includes two items: (a) a compiled program containing (i) the basic operating system for FieldServer products, which is common to every unit, and (ii) the correct set of protocol drivers based on the customer order (see FieldServer Services below for more information); and (b) a configuration file that identifies and links each data point as identified by the customer. The Company determined that the hardware, and the embedded software as defined above represent one performance obligation because the hardware is dependent upon and highly interrelated with the embedded software, and without which the hardware can’t operate. Generally, the software included in each sale does not require significant production, modification or customization and, therefore, the Company recognizes revenues at a point in time when control of the product is transferred to the customer generally occurring upon the shipment or delivery of products (depending on shipping terms), as described in Gas Detection and Environment Control Products above. If the software requires modification, refer to FieldServer Services for details. FieldServer Services FieldServer services consist of orders for custom development of protocol drivers. Generally, customers place orders for FieldServer products concurrently with their order for protocol drivers. However, if custom development of the protocol driver is required, the product order is not processed until development of the protocol driver is complete. The driver development involves further research after receipt of order, preparation of a scope document to be approved by the customer and then engineering time to write, test and release the driver program. When development of the driver is complete the customer is notified and can proceed with a FieldServer product. Revenues for protocol driver development are recognized at a point in time when the control of the product is transferred to the customer generally occurring upon shipment or delivery of the related product that includes the developed protocol drivers (as noted in FieldServer Products above). Discounts and Allowances Discounts are applied at time of order entry and sales are processed at net pricing. No allowances are offered to customers. |
Contract Costs | b) Contract Costs Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs mainly include the Company’s internal sales force compensation program and are included in sales and marketing expenses at the time the revenue is recognized. |
Warranty | c) Warranty The Company provides a warranty on all products sold for a period of two years after the date of shipment. Warranty issues are usually resolved with repair or replacement of the product. This standard warranty is assurance type warranty and does not offer any services in addition to the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, estimated future warranty obligations related to products are provided by charges to condensed statements of operations in the period in which the related revenue is recognized. |
Contract Balances | d) Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of only advance payments, where the Company has unsatisfied performance obligations. Contract liabilities are classified as deferred revenue and included within “Other current liabilities” on the condensed balance sheets. At times, billing may occur subsequent to revenue recognition, resulting in an unbilled receivable which represents a contract asset. The Company does not have any unbilled receivable on the condensed balance sheets. Deferred Revenue for the quarter ending March 31, 2019 December 31, 2018 Sept. 30, 2018 June 30, 2018 March 31, 2018 (unaudited) (unaudited) (unaudited) (unaudited) Beginning balance $ 28,658 $ 32,914 $ 62,639 $ 62,031 $ 61,673 Deferred revenues added 1,100 - 1,000 1,300 800 Previously deferred revenues recognized (733 ) (4,256 ) (30,725 ) (692 ) (442 ) Total, net $ 29,025 $ 28,658 $ 32,914 $ 62,639 $ 62,031 Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. There were no significant changes in estimates during the period that would affect the contract balances. The amounts of revenue recognized during the three months ended March 31, 2019 and March 31, 2018 from the opening deferred revenue balances were $733 and $442, respectively. For the periods ended March 31, 2019, and March 31, 2018 no impairment losses related to contract balances were recognized in the condensed statement of operations. |
Disaggregation of Revenue | e) Disaggregation of Revenue In the following table, net sales are disaggregated by geographic region The Company conducts business across 5 geographic regions: United States & Canada, Latin America, Europe, Middle East and Asia. FieldServer Products Flame & Gas Products Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 United States & Canada $ 2,721,000 $ 2,162,000 $ 2,087,000 $ 2,171,000 Latin America 18,000 59,000 16,000 36,000 Europe 244,000 219,000 5,000 34,000 Middle East 119,000 117,000 75,000 101,000 Asia 138,000 103,000 100,000 149,000 $ 3,240,000 $ 2,660,000 $ 2,283,000 $ 2,491,000 |
Shipping and Handling | f) Shipping and Handling The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. |
Remaining Performance Obligations | g) Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performances obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted that are scheduled or in the process of being scheduled for shipment. As of March 31, 2019, the remaining performance obligation is approximately $3,882,000, 36% or $1,379,000 of which is expected to be recognized in 3 months and 72% or $2,782,000 of which is expected to be recognized within nine months. The remainder is expected to be recognized after fiscal year 2019. |
Recent Accounting Pronouncements | h) Recent Accounting Pronouncements Recent accounting pronouncements discussed in the notes to the December 31, 2018 audited financial statements, filed previously with the SEC in our Annual Report on Form 10-K on April 1, 2019, that are required to be adopted during the year ended December 31, 2019, did not have or are not expected to have a significant impact on the Company’s 2019 financial statements. In February 2016, the Financial Accounting Standard Board (“FASB”) issued ASU 2016-02, Leases (ASC 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize Right-Of-Use (“ROU”) Asset and Lease Liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). On January 1, 2019, the Company adopted FASB Accounting Standards Codification (“ASC”) Topic 842 using the modified retrospective method for all material leases that existed at or commenced after January 1, 2019. ROU Assets are amortized over their estimated useful life, which represents the full term of the lease. The lease liability is representative of the present value of future payments due under the lease, discounted using the incremental borrowing rate. The lease liability will be increased by accreted interest at the incremental borrowing rate and reduced by future payments made under the lease obligation. On January 1, 2019, the Company recognized right of use (ROU) assets and liabilities of $1,335,148 in the accompanying condensed consolidated balance sheet. There was no impact to retained earnings upon the adoption of Topic 842. |
Employee Stock-Based Compensation | i) Employee Stock-Based Compensation In April 2016 and in May 2016, the Company’s Board of Directors and the Company’s shareholders, respectively, approved the Company’s 2016 Equity Incentive Plan (the “2016 Stock Plan”) and reserved a total of (i) 279,680 shares, plus (ii) 2,550,320 shares that remained available for issuance under the 2006 Stock Plan immediately prior to its expiration, plus (iii) any shares subject to stock options or restricted stock granted under the 2006 Stock Plan that, on or after the date the 2016 Stock Plan became effective, expired or otherwise terminated without having been exercised in full, or were forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2016 Stock Plan pursuant to clauses (ii) and (iii) equal to 2,668,320. Options granted under our 2006 Stock Plan and 2016 Stock Plan are at the fair market value of our common stock at the grant date, typically vest ratably over four years, and expire ten years from the grant date. As of March 31, 2019, a total of 1,516,000 shares were issued under the 2016 Stock Plan. All share-based payments to employees (incentive stock options) are recognized in the financial statements based on their fair values at the date of grant. The calculated fair value is recognized as expense (net of any capitalization) over the requisite service period, net of estimated forfeitures, using the straight-line method. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class and historical experience. The modified prospective method of application requires compensation expense to be recognized in the financial statements for all unvested stock options beginning in the quarter of award. The cost is based on the grant date fair value of the stock option. Compensation expense recognized in future periods for share-based compensation will be adjusted for the effects of estimated forfeitures. For the three-month periods ended March 31, 2019 and 2018, general and administrative expenses included stock based compensation expense of $59,272 and $46,660, respectively, decreasing the Company’s income before income taxes resulting from the recognition of compensation expense associated with employee stock options. There was no material impact on the Company’s basic and diluted net income per share as a result of recognizing the employee stock-based compensation expense. The Company did not modify the terms of any previously granted stock options during the three-month periods ended March 31, 2019 and 2018. |
Subsequent Events | j) Subsequent Events Management has evaluated events subsequent to March 31, 2019 through the date that the accompanying condensed financial statements were filed with the SEC for transactions and other events which may require adjustment of and/or disclosure in such financial statements. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Revenue | Deferred Revenue for the quarter ending March 31, 2019 December 31, 2018 Sept. 30, 2018 June 30, 2018 March 31, 2018 (unaudited) (unaudited) (unaudited) (unaudited) Beginning balance $ 28,658 $ 32,914 $ 62,639 $ 62,031 $ 61,673 Deferred revenues added 1,100 - 1,000 1,300 800 Previously deferred revenues recognized (733 ) (4,256 ) (30,725 ) (692 ) (442 ) Total, net $ 29,025 $ 28,658 $ 32,914 $ 62,639 $ 62,031 |
Schedule of Disaggregation of Revenue | In the following table, net sales are disaggregated by geographic region The Company conducts business across 5 geographic regions: United States & Canada, Latin America, Europe, Middle East and Asia. FieldServer Products Flame & Gas Products Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 United States & Canada $ 2,721,000 $ 2,162,000 $ 2,087,000 $ 2,171,000 Latin America 18,000 59,000 16,000 36,000 Europe 244,000 219,000 5,000 34,000 Middle East 119,000 117,000 75,000 101,000 Asia 138,000 103,000 100,000 149,000 $ 3,240,000 $ 2,660,000 $ 2,283,000 $ 2,491,000 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | A summary of inventories is as follows: March 31, 2019 December 31, 2018 (unaudited) Raw materials $ 2,094,785 $ 2,223,828 Work-in-process 1,647,593 1,751,671 Finished goods 546,749 406,478 4,289,127 4,381,977 Less: Allowance for obsolescence reserve (163,190 ) (148,190 ) $ 4,125,937 $ 4,233,787 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Net income available to common shareholders per common share: | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the shares used in the computation of basic and diluted EPS for the periods ended March 31, 2019 and 2018, respectively: Three months ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Basic EPS – weighted-average number of common shares outstanding 10,242,418 10,203,995 Effect of dilutive potential common shares – stock options outstanding 1,114,387 124,113 Diluted EPS – weighted-average number of common shares and potential common shares outstanding 11,356,805 10,328,108 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Product Information | In addition, the CEO reviewed the following information on revenues by product category for the following periods: Three months ended March 31, 2019 March 31, 2018 (unaudited) (unaudited) Instrumentation $ 2,283,637 $ 2,491,466 FieldServers 3,239,581 2,659,550 $ 5,523,218 $ 5,151,016 |
Operating Lease (Tables)
Operating Lease (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future lease payments under operating leases were as follows for the annual periods ending March 31: 2020 349,691 2021 360,182 2022 370,987 2023 382,117 31,921 Total lease payments 1,494,898 Less: Interest (228,144 ) Present value of lease liabilities 1,266,754 |
Summary of Business (Details Na
Summary of Business (Details Narrative) - $ / shares | Mar. 28, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Merger description | Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with SMC surviving the Merger as an indirect wholly owned subsidiary of MSA (the "Merger"). Upon completion of the Merger, each share of common stock, $0.001 par value per share, of the Company, issued and outstanding immediately prior to the effective time of the Merger (the "Effective Time"), other than shares owned or held in treasury by SMC, owned by MSA or Merger Sub, or with respect to which the holder thereof has properly exercised dissenters' rights, will be cancelled and converted into the right to receive $3.25 in cash per share, without interest and less any required withholding taxes. |
Accounting Policies (Details Na
Accounting Policies (Details Narrative) - USD ($) | Jan. 02, 2019 | Apr. 30, 2016 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | May 31, 2016 |
Warranty term | 2 years | |||||||
Deferred revenues recognized | $ 733 | $ 4,256 | $ 30,725 | $ 692 | $ 442 | |||
Impairment losses | ||||||||
Revenue remaining performance obligation | $ 3,882,000 | |||||||
Revenue remaining performance obligation, percentage | 36.00% | |||||||
Recognized right of use assets and liabilities | $ 1,335,148 | |||||||
Share based compensation | $ 59,272 | $ 46,660 | ||||||
2016 Equity Incentive Plan [Member] | ||||||||
Common stock, capital shares reserved for future issuance | 279,680 | 279,680 | ||||||
Number of shares available for grant under stock plan | 2,550,320 | |||||||
Number of shares authorized | 2,668,320 | |||||||
Common stock awards requisite service period | 10 years | |||||||
2006 Stock Plan [Member] | ||||||||
Common stock award vesting period | 4 years | |||||||
Number of shares issued under shares based compensation plan | 1,516,000 | |||||||
3 Months [Member] | ||||||||
Revenue remaining performance obligation | $ 1,379,000 | |||||||
Revenue remaining performance obligation, percentage | 72.00% | |||||||
9 Months [Member] | ||||||||
Revenue remaining performance obligation | $ 2,782,000 |
Accounting Policies - Schedule
Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | |||||
Deferred Revenue, Beginning balance | $ 28,658 | $ 32,914 | $ 62,639 | $ 62,031 | $ 61,673 |
Deferred revenues added | 1,100 | 1,000 | 1,300 | 800 | |
Previously deferred revenues recognized | (733) | (4,256) | (30,725) | (692) | (442) |
Total, net | $ 29,025 | $ 28,658 | $ 32,914 | $ 62,639 | $ 62,031 |
Accounting Policies - Schedul_2
Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
FieldServer Products [Member] | ||
Disaggregation of revenue | $ 3,240,000 | $ 2,660,000 |
FieldServer Products [Member] | United States & Canada [Member] | ||
Disaggregation of revenue | 2,721,000 | 2,162,000 |
FieldServer Products [Member] | Latin America [Member] | ||
Disaggregation of revenue | 18,000 | 59,000 |
FieldServer Products [Member] | Europe [Member] | ||
Disaggregation of revenue | 244,000 | 219,000 |
FieldServer Products [Member] | Middle East [Member] | ||
Disaggregation of revenue | 119,000 | 117,000 |
FieldServer Products [Member] | Asia [Member] | ||
Disaggregation of revenue | 138,000 | 103,000 |
Flame & Gas Products [Member] | ||
Disaggregation of revenue | 2,283,000 | 2,491,000 |
Flame & Gas Products [Member] | United States & Canada [Member] | ||
Disaggregation of revenue | 2,087,000 | 2,171,000 |
Flame & Gas Products [Member] | Latin America [Member] | ||
Disaggregation of revenue | 16,000 | 36,000 |
Flame & Gas Products [Member] | Europe [Member] | ||
Disaggregation of revenue | 5,000 | 34,000 |
Flame & Gas Products [Member] | Middle East [Member] | ||
Disaggregation of revenue | 75,000 | 101,000 |
Flame & Gas Products [Member] | Asia [Member] | ||
Disaggregation of revenue | $ 100,000 | $ 149,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,094,785 | $ 2,223,828 |
Work-in-process | 1,647,593 | 1,751,671 |
Finished goods | 546,749 | 406,478 |
Inventories, gross | 4,289,127 | 4,381,977 |
Less: Allowance for obsolescence reserve | (163,190) | (148,190) |
Inventories, net | $ 4,125,937 | $ 4,233,787 |
Net Income Per Share (Details N
Net Income Per Share (Details Narrative) | 3 Months Ended |
Mar. 31, 2018shares | |
Net income available to common shareholders per common share: | |
Number of outstanding options to acquire common stock | 808,000 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net income available to common shareholders per common share: | ||
Basic EPS - weighted-average number of common shares outstanding | 10,242,418 | 10,203,995 |
Effect of dilutive potential common shares - stock options outstanding | 1,114,387 | 124,113 |
Diluted EPS - weighted-average number of common shares and potential common shares outstanding | 11,356,805 | 10,328,108 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash uninsured amount | $ 1,756,000 | $ 2,464,000 | |
No Customers [Member] | Accounts Receivable [Member] | |||
Concentrations risk percentage | 10.00% | 10.00% | |
No Customers [Member] | Sales [Member] | |||
Concentrations risk percentage | 10.00% | 10.00% |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 3 Months Ended |
Mar. 31, 2019Segment | |
Segment Reporting [Abstract] | |
Number of business segment | 1 |
Segment Information - Schedule
Segment Information - Schedule of Product Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 5,523,218 | $ 5,151,016 |
Instrumentation [Member] | ||
Net sales | 2,283,637 | 2,491,466 |
Field Servers [Member] | ||
Net sales | $ 3,239,581 | $ 2,659,550 |
Line-of-Credit (Details Narrati
Line-of-Credit (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Line of credit facility, maximum borrowing capacity | $ 2,000,000 | |
Long-term line of credit |
Operating Lease (Details Narrat
Operating Lease (Details Narrative) | 3 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Lease terminates | Apr. 30, 2023 |
Incremental interest rate | 5.00% |
Operating Lease - Schedule of F
Operating Lease - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Mar. 31, 2019USD ($) |
Notes to Financial Statements | |
2020 | $ 349,691 |
2021 | 360,182 |
2022 | 370,987 |
2023 | 382,117 |
Thereafter | 31,921 |
Total lease payments | 1,494,898 |
Less: Interest | (228,144) |
Present value of lease liabilities | $ 1,266,754 |
Stock Option Grants (Details Na
Stock Option Grants (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Option Grants | ||
Share-based compensation arrangement by share-based payment award, options, granted | 41,000 |
Stock Option Exercises and Ex_2
Stock Option Exercises and Expirations (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Option Exercises And Expirations | ||
Number of share options exercised during period | ||
Number of share options expiration during period | 1,000 |